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Chad Poverty Assessment: Constraints to Rural Development


Chad FY98 PA

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This assessment focuses on rural development because more than four-fifths of the population and an even larger proportion of the poor live in rural areas. The more specific focus is on agriculture since more than four-fifths of the economically active population works in agriculture and because agriculture is the most likely source of improvements in incomes that would benefit the poor majority. Finally, it focuses on women, who contribute much of agricultural labor, because they are an important source of improvements in agricultural incomes.

The assessment finds a pattern of severe poverty in the available indicators, whether of living conditions (potable water, toilets, housing), food security (nutrition, famine), survival, morbidity, education, or of household assets (such as plows), incomes, and expenditures. The pattern is often one of poverty that is spread across the major regions, although several aspects such as famine, primary school enrollment and the proportion of women-headed households differ across regions. Moreover, women in every region are particularly poor in terms of education, health and land.

The assessment concludes that Chad has excellent prospects for emerging from severe poverty and of sustaining improvements in public well being through the efforts of poor agricultural producers of livestock and crops. A main avenue of action to raise producer prices would be investment in rehabilitation of roads to reduce transport costs of agricultural products. This would be reinforced by a further avenue of actions to reduce costs to agricultural producers, particularly taxes imposed by local and traditional leaders and those imposed illegally on transport. A parallel measure would be to reduce the implicit charge on cotton producers, who receive a fraction of the world price of seed-cotton, through cautious liberalization of the market. Higher incomes would then allow agricultural producers to make some of the investments (in livestock, and agricultural equipment) necessary to increase their productivity, so that further increases in production become possible. Higher and sustained investment in basic education and health, especially for girls, would
further improve the well being and agricultural productivity of producers over the long-term.

These positive prospects are founded on the government's determination to focus public expenditure on poverty reducing investments (on roads, health, and education), to adopt the needed policies, and on the expected development of petroleum resources.

Extent and Distribution of Poverty

The background to poverty is the physical size of the country that may lead to isolation, the sometimes-harsh natural environment and the diversity of the environment. The southern or Soudanian zone is ecologically part of the wet Congo basin; the main cash crop is cotton, but farmers raise large crops of peanuts, millet and sorghum. The dry Sahel zone lies at the middle of Chad; the main activities are cattle herding and farming of cereals such as millet and bérbéré (a form of Sorghum). The Saharan zone lies to the north and the main economic activities are dates, camel herding and transport. In 1993, nearly half the population lived in the Soudan and half lived in the Sahel, while only 4 percent lived in the Sahara.

Poverty is defined in economic terms as household expenditures or revenues that fall below a preset poverty line. The best available source of information on the extent and characteristics of poverty when this assessment was prepared were the indicators of living conditions, health, education and family structure from the 1993 Census. Information from the Census was reinforced by annual government data on education and health as well as data on rural conditions from the Ministries of Rural Development, Agriculture and Livestock and the Office National de Développement Rural. Fortunately, research has shown that these indicators are closely correlated with expenditure-based measures of poverty.

However, the paucity of information did limit the measurement of poverty in Chad. There has not been a national survey of household expenditures and there does not seem to have been a national survey of nutrition. The assessment does, however, make use of a 1991 household survey for N'Djaména. More importantly, the assessment includes a brief summary of results from the Department of Statistics and UNDP survey of household expenditures in four large prefectures in 1995/96 that became available during the final editing. The assessment also draws heavily on the considerable volume of studies of by academicians, donors and development consultancies, and on field visits.

Available data show that Chad is very poor relative to the needs of its residents and relative to its neighbors in sub-Saharan Africa. GNP per-capita, for instance, was US$180 in 1995 compared with US$490 for sub-Saharan Africa. The mortality of children under one year in 1995 was 117 per thousand live births compared with 92 for sub-Saharan Africa, 29 percent of the population had access to safe water compared with 47 percent for sub-Saharan Africa and the illiteracy rate in 1993 was 90 percent, compared with 50 percent for sub-Saharan Africa.

Poverty is severe in every region if one judges from the indicators of housing quality and access to potable water and type of toilet, but there are differences. Parts of the Sahel suffer from repeated famines and school enrollment is relatively low. Moreover, the Census reports a striking shortage of men in the most economically active age groups in parts of the Sahel. In the Soudan zone, school enrollment is relatively high, but several of the health indicators, in particular survival, are relatively weak. Farmers in the Soudan are also very poor in terms of agricultural implements such as plows and carts. The poverty rate in four large prefectures was about two-thirds in 1995-96, according to a preliminary calculation using the recent Department of Statistics-UNDP survey. This rate was defined as the percentage of households with food expenditures that fell below the amount needed to purchase the biologically necessary calories.

Agricultural Productivity

Any strategy to reduce this poverty must relax constraints to agriculture because crop and livestock production are the primary engines of growth in Chad. They contribute about one-half of national income, when food and agriculture-related industry and services are included. For the most part, agricultural cash incomes in Chad are derived from sales of cotton, gum Arabic, peanuts, vegetables and cereals. Cotton crops and cotton lint have only a 10 percent share in the broad definition of agricultural GDP, yet the importance of cotton cannot be denied: cotton contributed 50 percent to the value of exports and 25 percent to government revenues. The cotton sub-sector helps sustain some 345,000 farm households and more than 2,000 salaried workers at Cottonchad. More important, perhaps, cotton is the major contributor to farm cash income because it remains the main commercial crop in Chad.

A poverty reduction strategy must nevertheless consider other crops and livestock as well. Cotton is produced only in the cotton zone of the Sudan and even in the zone, only about one-third of the planted area is in cotton. Surveys in the zone indicate that on average, cotton accounted for about two-fifths of gross farm revenue in 1995, while sorghum, groundnuts and peanuts contributed almost half of the total. Livestock is a dynamic source of growth of exports and also a store of wealth.

With regard to crops, one of the most fundamental facts is that yields are low, even when compared with similar parts of Sub-Saharan Africa. The other fundamental fact is that producers receive a relatively small share of the revenue from their products, as measured by the share of producer prices in final consumer prices. This limits the incentive and the financial capacity to make improvements that would improve yields.

Transport Costs

Physical isolation is one of the causes of the wide gap between producer prices and final consumer prices. Some areas within Chad become enclaves during the rainy season. There are pockets of surplus production, where foodstuffs sit in storage because they cannot be sent to consumption centers and there are pockets of food shortage, where additional food cannot be delivered for months. For example, a major producer of grains and known as the potential -breadbasket- of Chad, the Salamat, has long been largely unreachable during 6 to 8 months of the year because of poor roads and high rainfall.

The main reason for the persistence of these enclaves is the low density of Chad's road network compared with many other Sub-Saharan countries. The 1972-82 civil conflict left Chad with only 30 km of paved roads in 1986. Since then, successive road rehabilitation projects have improved the road network, but much remains to be done: today, Chad still has very few paved roads, moreover, many unpaved roads are in poor condition.

Several studies in Chad link poor road infrastructure to high transport costs and the high transport costs to high consumer prices and low producer prices. The conclusion is that without improved roads, transport costs will probably not be brought low enough to improve the commercialization of agricultural products from enclaved regions and to reduce food insecurity.

Charges on Agricultural Producers

Another major constraint is the cumulative charge to agricultural producers. Charges are imposed by the central and local governments, traditional leaders, civil servants, and armed groups. Together these charges drive a wedge between the price retained by farmers and herders and the price paid by the final buyer. The result is to reduce final consumption of Chadian agricultural products, to discourage production and investment in agriculture, and to harm farmers by lowering their incomes and consumption.

The main official taxes on agriculture are the UDEAC tariffs on imports of agricultural inputs such as fertilizers and tools, although these have been adjusted downwards over the past several years. There is also a statistical fee, a complimentary tax on agricultural equipment and diesel vehicles and rural investment fund and research taxes.

The operations of Cottonchad lead to an implicit charge on the small cotton farmers. Cottonchad is a majority state-owned company that also has a private shareholder, the CFDT, which manages much of the company under contract. Cottonchad has the exclusive legal right to buy unprocessed Chadian seed-cotton from producers, mostly poor small-farmers. It is also a vertically integrated monopsony that gins and then markets the processed cotton lint through its own network. Cottonchad buys at a price fixed in advance of the growing season, offering in effect a price guarantee and also provides fertilizer and pesticides on credit.

The issue of direct concern for the assessment is the extent to which Cottonchad transfers resources from the small producers to its owners and managers by paying a price for seed-cotton that is below the competitive market price. A comparison of fluctuations in the price of seed cotton and cotton lint suggests that Cottonchad has not passed on most of the benefit of the of the CFAF to producers.

Despite the central government's efforts, local governments still continue to levy taxes on producers and traders of agricultural products, though the magnitude is reportedly less than in the past. For example, prefecture-level officials generally impose a tax on movement of cereals and sometimes other produce from one prefecture or even one market to another --in spite of repeated instructions in 1993 and again in 1994 and public announcements via radio and press that this illegal procedure would not be tolerated. Furthermore, local traditional and civil authorities also collect informally imposed 'taxes.' Despite the central government's efforts, local governments still continue to levy taxes on producers and traders of agricultural products, though the magnitude is reportedly less than in the past. For example, prefecture-level officials generally impose a tax on movement of cereals and sometimes other produce from one prefecture or even one market to another --in spite of repeated instructions in 1993 and again in 1994 and public announcements via radio and press that this illegal procedure would not be tolerated. Furthermore, local traditional and civil authorities also collect informally imposed 'taxes.'

Several studies have focused on the role of illegal road charges, or bribes, on raising transport costs within Chad. In recent years, the Chadian government and donors have joined forces in an effort to stamp out illegal payments and harassment of passengers and transporters at internal road barriers. The President issued a decree in June 1993, banning road barriers and illegal searches of passengers and transporters throughout the territory and there were subsequent efforts to suppress roadblocks. However, illegal charges have two root causes that show no sign of disappearing: one is that low-paid paramilitary forces find in illegal payment a convenient means to supplement income. The second is that the victims, transporters, often themselves initiate bribes to avoid paying heavier fines for such violations as lack of proper transport documents, unsafe vehicles, desire for quick release at rain barriers and smuggling.

Women's Contribution to Agriculture

Women contribute much of agricultural labor and make some production decisions so that constraints on women reduce household incomes from agriculture. In many local traditions, for example, there are women's crops as well as women's tasks. Moreover, the traditional allocation of activities by gender results in a constraint on time. Rural women are traditionally responsible for household chores and maintenance, the preparation of food, transport of fuel wood and water, for much farming, the education of children and family health care. Women work longer hours than men and have less control of their time. This may crowd out time spent in agriculture and lower their productivity.

Limits on women's right to inherit land and to consume the product of the land may further constrain women's productivity. There is a basic tension in the legal system because national law recognizes women's rights but traditional law sometimes denies those same rights. Lack of rights may then discourage women's investment in land improvement, agricultural equipment and livestock. It may also lead to inefficient decisions about which land to work and what agricultural methods to use.

Another constraint is limited access to formal credit, which limits working capital and investment. Rural women have access to informal sources of credit and to credit in kind; to accumulate cash savings, women sometimes organize into informal, rotating, savings associations.

Women's general capacity for productive labor may be constrained by a combination of recurrent intestinal disease and malaria, poor nutrition, tightly spaced childbirths and female genital mutilation. Unfortunately, however, little is known about how women's general health is linked to their productivity in agriculture. The female disadvantage in education, as measured by school enrollment and literacy rates, more clearly constrains women's productivity. Several econometric studies document the link between female education and productivity in agriculture.

Education as a Constraint to Rural Incomes

Education may significantly constrain agricultural productivity by limiting the ability of both women and men to prevent disease, make use of extension and, most importantly, to respond to new technologies, markets and regulatory systems. Evidence from Asian studies suggests that a literate farmer has significantly greater productivity than an illiterate one. Moreover, a survey of econometric evidence suggests that educating rural women increases agricultural productivity by making them more receptive to new technology and increases the chances that other women will adopt the technology.

Only half of Chadian children, and a third of girls, enter school. A dropout rate of 20 percent and a repetition rate of 35 percent suggest high levels of inefficiency in the system. Lack of public funds constrains the supply of basic education, but there is also a limited demand for education outside the towns, particularly in the Sahelian and Sahara regions, and also for girls. Lack of demand is often a response to the poor quality of education. The primary curriculum, calendar and structure may be poorly adapted to Chadian needs: the school calendar, for example, is based on that of France and a Monday to Saturday school week, rather than on local agricultural cycles. Curriculum includes theoretical content that cannot be covered in the time allotted and there is insufficient focus on basic literacy and numeracy skills and health. A major quality problem is that schools are often closed or teachers are not present since they are sometimes not paid. Teachers who are not well paid or paid irregularly feel obliged to look for activities to supplement their earnings or even to abandon their posts for more lucrative employment. Textbooks in rural schools and instructional materials are almost non-existent and there are inadequate desks for students.

The inefficiencies of the system mean that the opportunity costs of primary education are high with 9 to 10 years needed to complete the primary cycle. This appears to constrain demand for the education of both girls and boys. The opportunity cost of enrolling a girl, for instance, in primary school may be high since school attendance reduces the time available for girls to do household chores. If they stay home they can fetch firewood and water, prepare meals and baby-sit, which frees their mothers for food or revenue-generating work.

Health

The health situation in Chad remains precarious despite the efforts of the Ministry of Health during the past few years. In 1993, according to the Census, life expectancy at birth was only 50 years and mortality rates, especially of pregnant women and infants, were high. The principal causes of mortality and morbidity are infectious and parasitic diseases. Tuberculosis, leprosy and poliomyelitis are still prevalent and the prevalence of HIV is increasing. An additional concern is female genital mutilation, which is widespread and which poses a risk to women's health, as its physical and psychological effects on girls and women can be traumatic and can affect their reproductive health.

Almost 60 percent of the local health zones now have a functional health center but only about half the population of these zones really have access to basic health services because of distance, lack of roads, etc., and only about 35 percent of the population has access to modern health services. The quality of the services provided is often mediocre or poor because of insufficient equipment, lack of water, an irregular supply of medicines, and above all, a shortage of qualified personnel. The government has committed itself to a National Health Policy that emphasizes access to primary health care and a reduced concentration of health sector management. Its budget expenditures on health have been increasing, and reached 7.5 percent of the budget in 1996 compared with 3.9 percent in 1988. Since 1989, external aid has represented more than three-quarters of all health expenses of the public sector. Even with external aid, total government spending on health only reached a relatively low US$4.50 per inhabitant in 1996.

Rule of Law

The rule of law as a constraint to rural development is a theme that appears in discussions of education, rights to land, taxation of agricultural producers by local officials and traditional leaders and bribes charged to transporters. The weakness of the banking and payments system may be related to the rule of law, since it is difficult to safely transport cash and appears related to enclavement resulting from the lack of roads and telecommunication. The difficulty of making payments increases the costs of trade in agricultural goods and inputs and the weak banking system means that there is nearly no formal private credit for agriculture.

An Action Plan to Reduce Poverty

The assessment proposes a number of feasible avenues to poverty reduction, starting with actions to increase agricultural productivity and competitiveness by reducing the costs of transport and of modern inputs. The most important measure to reduce costs could be to upgrade the road network through rehabilitation. A program of road rehabilitation and maintenance that would improve road conditions, that would open the principal enclaves and connect food surplus regions to markets, would be a win-win proposition because it would reduce agricultural prices at final markets and increase prices to producers, while improving food security.

Specific road construction and rehabilitation projects normally need to be justified by an economic cost-benefit analysis in which the internal rate of return reaches a minimum threshold. Traditional methods of economic cost-benefit analysis often fail to demonstrate acceptable rates of return because the road network carries very little traffic on average, so that the direct economic benefits from reduced vehicle operating costs are low. On the cost side, the absence of suitable building materials (such as laterite and gravel) in many areas of Chad and the need to haul such materials over long distances, makes construction rather expensive.

Nevertheless roads provide numerous benefits which are not easily captured by traditional cost-benefit methods. It is difficult to measure the extent to which new or rehabilitated roads will stimulate agricultural trade over the medium-term. Some types of roads would also provide access for most of the year to regions that are isolated by seasonal rains. Moreover, roads can be justified in terms of food security by connecting the capital to famine regions and by connecting enclaved grain producing regions to markets. Also, roads help to provide access to basic education and health services that are essential to reduce poverty. Road projects should therefore be justified through a broad and inclusive approach to estimating benefits.

A major step toward reducing rural poverty would be to increase the share of the world market cotton price received by the farmer through cautious liberalization of the cotton market associated with greater investment in community participation for input supply and cotton marketing. This should be facilitated by government fulfilling its commitment, in the Letter of Development Policy of the SAC II, to lift the legal monopoly of Cottonchad on the primary marketing of seed cotton, ginning, and fiber and cottonseed marketing.

Formal taxes do not appear high enough, by themselves, to significantly discourage recovery of agriculture. A qualification is that, because of difficulty in communicating the tariff code to agents, it is uncertain what tariffs are actually being imposed on imports of fertilizers, so that tariffs actually paid may be relatively high. The available evidence points the need to reduce informal taxes on transport and taxes imposed by local and traditional leaders. The establishment of law and order on transport routes and among elements that sometimes collect illegal charges on roads would contribute to the expansion of agriculture.

It appears that there is considerable potential to improve agricultural incomes through easing the constraints on women. Some options are increased research into food crops raised by women and preparation of female-focused extension messages. Better access to labor-saving technology for household and agricultural tasks such as fetching water and wood would increase productivity by easing time constraints. Another option is to encourage women to form affinity groups to obtain credit or save for economic activities. The most fundamental actions would be to improve basic health and education.

To assure that schools are open and that enrollment expands the government would need to increase funding. The government would probably not be able, even with the expected petroleum revenues, to sustainably fund a satisfactory increase in primary enrollment. Community participation will therefore be important to complement public funding and to assure that schools operate and that quality improves.

Increased funding by itself would not sustainably improve enrollment and educational achievement: that would require an improvement in the quality of education. To this end, the government could reduce the length of the primary educational cycle, and benefit from informal or multi-class approaches so that learning can actually take place in the village. Moreover, it could harmonize the school calendar with seasonal cycles in the demand for agricultural labor. Some specific steps to increase girls' enrollment would be to provide separate latrines, assure that new school building lowers distances walked to schools, and establish better security for girls through education and supervision of teachers.

The government should redevelop its education strategy, in consultation with civil society and with donors, to assure that it is using its resources efficiently. Such a strategy should propose ways to: (i) reduce the length of primary schooling; (ii) select, train, recruit, and employ teachers; (iii) increase the role of Associations Parents-Elèves in school and teacher management; (iv) improve the primary school curriculum and develop Chadian text books; (v) reduce adult illiteracy with large scale adult literacy interventions; (vi) improve the progression rate from primary to secondary school; and (vii) estimate the costs of a basic education program of primary and adult literacy through 2015.

To improve public health, the government could pursue its policy of decentralizing authority and resources in the health system. The government would also need to continue increasing resources devoted to the sector, although donors are likely to continue to play an important role. These actions would need to be complemented by training of more personnel and their posting in the regions. Women suffer relatively high rates of maternal mortality and this could be reduced by training of more qualified personnel, better access to antenatal care and a reduction in adolescent pregnancy. The first step to reduce the health consequences of genital mutilation would be an education campaign among religious and civil leaders.

Development of petroleum resources offers Chad a unique opportunity to accelerate the implementation of a poverty reduction strategy. The government has indicated its determination to use additional resources for poverty alleviation and in particular rural development (including infrastructure), health, and education. These public resources will be shared increasingly with decentralized entities and the execution of public expenditures will rely increasingly on these decentralized entities and on non-governmental institutions.




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